EAST Asia and Pacific economies will see growth edge down this year despite many countries benefitting from lower oil prices, the World Bank said today.
Growth in China is likely to moderate further this year to 7.1 per cent in 2015 and 6.9 percent in 2017. It was 7.4 per cent last year.
Over the rest of the region as a whole growth is expected to pick up, reflecting a recovery in investment and consumption, partly driven by lower fuel prices.
The impact of lower fuel prices varies from country to country depending on net fuel imports, energy intensity in production, and the share of oil and gas in total energy consumption.
Cambodia, the Philippines and Thailand are expected to see growth boosted, while Malaysia and Papua New Guinea will see small GDP losses.
“Despite slightly slower growth in East Asia, the region will still account for one-third of global growth, twice the combined contribution of all other developing regions,” said Axel van Trotsenburg, World Bank East Asia and Pacific regional vice president.
He added that lower oil prices will boost domestic demand in most countries in the region and give policy makers a “unique opportunity to push fiscal reforms that will raise revenues and reorient public spending toward infrastructure and other productive uses”.
“These reforms can improve East Asia’s competitiveness and help the region retain its status as the world’s economic growth engine,” said van Trotsenburg.